Billionaire hedge fund manager Kenneth Griffin is warning that a combination of persistent inflation and rising concerns over U.S. sovereign risk is driving investors to seek shelter in alternative assets like gold and cryptocurrencies.
Gold And Crypto’s ‘Unbelievable’ Run
On Monday, in an interview with Bloomberg, Griffin said, “inflation is substantially above target, and substantially above target in all forecasts for next year,” noting that it was part of the reason behind the U.S. Dollar’s sharp depreciation during the first six months of this year, the “single biggest decline” in the currency in 50 years.
This depreciation in the dollar, according to Griffin, is fueling significant flows into non-dollar stores of value. “Gold is at record highs,” he said, while noting that “other Dollar substitutes” such as cryptocurrencies have had a similarly “unbelievable” run-up.
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“We’re seeing substantial asset inflation away from the dollar as people are looking for ways to effectively de-dollarize or derisk their portfolios vis-a-vis US sovereign risk,” he said.
Gold Could ‘Go To $20,000’
According to economist Peter Schiff, gold’s rally is not going to stop, because the “dollar is not going to stop going down.” He makes the case for the yellow metal to soar past $5,000 and even $10,000 an ounce. “It's going to go higher. I mean, it could go to $20,000,” he said, in an interview last week.
On Monday, in a post on X, Schiff noted that gold had touched a new record high, “trading above $3,975,” while adding that it was a clear warning that the “current Fed policy is wrong.”
“The Fed needs to reverse course immediately, raise interest rates between meetings, and signal that more rate hikes are coming,” he said, to arrest the dollar’s decline and the rally in gold prices.
Analyst Peter Brandt agreed with Schiff’s views and said that “gold may go substantially higher before any meaningful correction,” while acknowledging that he has no clue how high it can go, in a post on X.
Cryptocurrency analyst Michaël van de Poppe, however, believes that the yellow metal’s unprecedented 47% year-to-date rally will be met with a “significant correction,” adding that it could be either “this month or later in the year.”
Gold prices are up 0.32% on Tuesday, trading at $3,964.53 per ounce, following a pullback from $3,975 per ounce earlier in the day.
Photo: Thichaa on Shutterstock.com
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